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World's Safest Banks 2017 | Country Winners

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Global Finance magazine has expanded the individual country rankings, with 15 banks making the list for the first time.

November 09, 2017

Sixteen new banks appear in this year’s country-by-country ranking of the World’s Safest Banks. Three of these are in countries that didn’t feature in last year’s list, while 13 replace last year’s winners.

This year’s list features 106 countries, a net increase of two over last year. Fitch withdrew its rating on Tai Fung Bank, with the result being that there are no longer any rated banks in Macau to rank. The three new countries are Honduras, Kosovo and Tanzania, where first-time ratings have been assigned to Inversiones Atlántida, ProCredit Bank and CRDB Bank.

New winners earn their position in a variety of ways: a rating upgrade, a downgrade of rival banks or a change in asset size.

METHODOLOGY

Global Finance’s list of the safest banks by country is based on the same long-term foreign-currency credit ratings used in our other Safest rankings, but provides insight on a far larger range of countries than appear in our Global, Emerging Markest and Commercial lists. To be eligible for inclusion in this list, a bank must be among the biggest 1,000 banks in the world, ranked by asset size. [To make the global rankings, banks must be among the world’s biggest 500.]

Another difference is that banks do not need to hold at least two ratings to be included—a single rating from one of the three agencies is sufficient. We use a proprietary algorithm to calculate imputed second and third ratings in order to score such banks. Many of the banks considered for inclusion in the country-by-country rankings hold ratings in sub-investment-grade territory, often due to a low rating for the home government.

When there are several banks in a single country that hold the same rating, they are ranked by asset size, in recognition of the strong positive correlation that exists between large asset size and high credit ratings.

In Austria, BAWAG replaces Erste Bank after an upgrade from Moody’s and a first-time rating of A- from Fitch. BNP Paribas Fortis replaces KBC after an upgrade from Fitch. Česká Spořitelna replaces Komerční Banka in the Czech Republic following an upgrade from S&P. And in Hungary, OTP replaces the Hungarian Export-Import Bank after upgrades from both Moody’s and S&P.

In Turkey, Garanti Bankasi replaces Türk Ekonomi Bankasi by holding onto relatively high ratings after the three agencies reassessed their ratings on both the Turkish government and the local banks, downgrading some.

In Ukraine, Alfa-Bank (not related to Alfa Bank of Russia) becomes the safest bank by holding on to its ratings after last year’s winner, PrivatBank, was downgraded by Moody’s and Fitch.

National Bank of Greece loses its position as Greece’s safest bank as a result of a decline in its asset size. In line with the methodology used for our other rankings, when banks have the same score, the bank with the largest asset size is ranked first, reflecting the strong positive correlation between asset size and high ratings.

In some countries, nearly all banks have ratings deep in sub-investment-grade territory. In Central Asia, even the safest banks are often rated in the single-B range. Of the eight countries in sub-Saharan Africa, only South Africa has banks rated investment-grade. Elsewhere, ratings are single B or even lower.

In Western Europe, only Greece and Cyprus have banks with an aggregate rating below investment grade. The safest banks in all the other 20 Western European countries have investment-grade ratings.

Asia earns a huge range of ratings. The safest banks in Singapore and South Korea, DBS and Korea Development Bank, are among the safest in the world. In contrast, the safest bank in Pakistan has a single rating of Caa1 from Moody’s; while in Mongolia, Trade and Development Bank has a Caa2 from Moody’s and B- from S&P.